Uber ride-sharing startup eyes push into Boulder

'Boulder is such a unique market'

Kevin Labonte owner of Special Times Limousine, helps a customer unload his luggage at DIA. Labonte supplements his own fares with those he contracts out from Uber. (AAron Ontiveroz / Daily Camera)

Uber — the popular, yet controversial, startup that brought its "e-hailing" ride-sharing service to Denver in 2012 — is weighing a broader push up the U.S. 36 corridor into Boulder.

Officials for the San Francisco-based company told the Daily Camera that they're conducting a soft launch in Boulder, a tech startup-friendly city home to some high-profile advocates of the mobile app that allows users to secure a ride with an Uber-connected driver.

"Boulder's been one of those regions here on the (Colorado) Front Range that definitely has been in the cross-hairs," said Will McCollum, general manager for Uber's operations in Denver.

When Uber planned its launch into Colorado, the company worked closely with David Cohen, a founder of the Boulder-based startup accelerator program TechStars, and eyed a broader push up U.S. 36 northwest of Denver, McCollum said.

"The original objective was to try to get that 36 corridor working, but we ended up scaling back some of the geography," McCollum said. "Now we're getting to a point where that Boulder market is looking great."

The timing and what that effort might look like are a little cloudy.

Uber has not contacted Boulder's licensing department to inquire about operating in the city, said Sarah Huntley, a spokeswoman for the city of Boulder. A business such as Uber would need a business license, she said.

Additionally Uber's model and value proposition relies heavily on a strong cycle of supply and demand.

"The more reliable service that we can provide, the more that gains traction (for) better client service," McCollum said. "If we bite off too much to chew. . . the drivers get frustrated."

Colorado debut not free of conflict

And Boulder could prove to be an interesting experiment.

"Boulder is such a unique market in that it's so progressive, so on the cutting-edge," he said. "People live close to where they play, but on the other end, that makes it more challenging for a company like Uber to connect rides.

" . . .It's definitely a challenging market, but one we definitely want to participate in."

In addition to basic economics, Uber's expansion hinges on plenty of competitive and regulatory concerns.

Since its San Francisco launch in 2010 and expansion to 15 U.S. markets, Uber has encountered hurdles ranging from lawsuits filed by cabdrivers and car service companies, fines from municipalities and battles with regulatory commissions. The company recently has come under fire after one of its drivers, while not on-duty, hit and killed a 6-year-old girl in San Francisco.

The company also faced criticism for its surge pricing, which includes escalated fares at times when demand is higher than the Uber drivers on the road.

Uber's entrance into Colorado has not come free of conflict.

The launch of the company's "Uber Black" program — in which the firm licensed with third-party limousine and car companies, disperses equipment to the drivers and charges customers at least $15 per fare — stirred consternation among taxi companies that alleged the startup was offering similar services without being under the same regulations. Cab companies also raised concerns that ride-share programs like Uber posed risks to public safety because the drivers' background checks and insurance offerings were not under regulatory oversight.

The Colorado Public Utilities Commission regulates taxi cab rates but not limousine fares

Last fall, the Colorado PUC did not adopt proposed rules that would have not allowed limousines to collect fares based on time and mileage.

Regulatory and competitive concerns heightened after the company moved forward with the Denver launch of its uberX program, which allows independent drivers to use their own vehicles and charge a minimum fare of $6.

Last week, the Colorado Senate passed a bill that would define on-demand ride-share programs like uberX and Lyft as "transportation-network companies." The bill also would require the companies to provide liability insurance, conduct background checks of their drivers and apply for operating permits with the PUC.

The bill, which passed on a vote of 29-6, now is headed to the state House.

The proposed regulations don't go far enough, said Kyle Brown, general manager of Metro Taxi in Denver, which operates as Northwest Suburban in the Boulder region.

"The bill tries to allow for different time periods when the insurance is active and when it's not, and that just leaves gaps," Brown said.

Ride-sharing services such as Uber and Lyft should be required to have commercial liability insurance for their drivers and finger-printed background checks, he said.

"Our main concern is for public safety," he said. "They're going to bring the standards down just so they can operate."

Uber officials say their drivers are put through a background check that includes driving records and felony offenses. The driver has personal insurance supplemented by an excess policy.

'Consumers and drivers both love Uber'

The emergence, and success, of companies like Uber also could result in a defection of drivers from the traditional cab companies, which are required by state regulations to have transportation options available 24 hours a day, seven days a week in all conditions, Brown said.

If transportation-network companies are not held to the same standards, they'll go after the more lucrative fares and make it difficult for taxi companies to serve the community, Brown said.

"Taxis service is a public utility, so if that public utility leaves, there is a group that will be left behind," he said. "That could be seniors, the disabled, the low-income (residents)."

TechStars' David Cohen, an investor in Uber since the company's early stages, said the company's services benefit the consumer.

"It's hyper-convenient — just pull up a mobile app, order a car and take your ride," Cohen said in an e-mail to the Camera. "When you're done, just get out. Billing is handled automatically."

Cohen said he believes Uber needs to exist everywhere cars are needed. In a city like Boulder, the company could serve as another option for situations such as inclement weather and for longer rides to places such as Denver and the airport.

"(Uber has), of course, run into opposition and much of (that) has been protectionist in nature," Cohen said. "In Denver, that's come from the PUC. Uber has won this battle over and over in other parts of the world, and that's good for consumers and drivers.

"One thing is crystal clear — consumers and drivers both love Uber even if their competitors don't."

Officials for Boulder Yellow Cab, the city's largest cab company, deferred comment to the president of the Colorado Cab Company, who could not be reached late Friday.

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